Why Should Software Developers Care About Customer Data Platform (CDP)?

A Customer Data Platform (CDP) is a powerful tool that enables companies to create a unified view of a customer profile. This can help businesses drive better results by connecting with customers across channels, identifying customers' journeys.

But what is a Customer Data Platform (CDP)? Why should you use such a platform? And how can software engineers benefit from this technology? In this post, we'll explore all this in deeper detail.

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There Are Way Too Many Types of Data Platforms Out There

All of these jargons may confuse you.

What's a Data Warehouse? What’s a Data Manipulation Platform? How is a CDP different from a Customer Relationship Management (CRM) tool? And what does it have to do with marketing automation?

These tools are solutions that help companies make better use of data. They combine multiple tools into one, so you can manage all your customer experience efforts in one place. This makes it easier to track your customers’ behaviour and build more personalised experiences for them.

One of those tools that we’re going to explore is the Customer Data Platform or CDP. A CDP can be so powerful that you might want to include it in your stack.

What is a Customer Data Platform (CDP)?

Based on Segment’s definition, a Customer Data Platform (CDP) is a software solution that unifies data from various sources to establish a centralised customer database. This database encompasses information on all points of contact and interactions with your product or service.

It combines the best features of a Data Warehouse, a Data Lake and a Data Catalogue.

CDPs are made to help companies organise, manage and leverage their customer data. It merges real-time data into one single source of truth. This will tell you about your centralised customer profile and help in identity resolution. Customer Data Platform (CDP) helps understand what a visitor has done within your company’s digital space.

With this approach, you and your organisation can make better decisions and stay ahead of the competition. Understanding customer behaviour, managing data collection, and translating it into actionable insights drives better business decisions.

A unified customer profile from a variety of data sources can help drive better business results. Data is the new currency, and a Customer Data Platform (CDP) will enable you to leverage your data to be competitive in today's market.

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Why Use a CDP when you have all data platforms?

As a , you may be wondering how you can make use of a CDP. CDPs can be incredibly useful for engineers who are responsible for building and maintaining the infrastructure.

By using a CDP:

• You can organise your data and make it relevant to different teams. From your marketing team, sales team, down to your peer engineers.
• You’ll be able to streamline your data management processes by processing what is in and what is out. Which can save you time and make it easier to troubleshoot issues as they arise.
• CDPs are designed specifically for Product Analytics. It provides engineers and related stakeholders all the needed customer data. Every business unit will be able to identify customer behaviour and customer engagement with their own data in the clearest detail.

Harnessing the power of customer data

This is where CDPs come into play. They mark a significant shift in how businesses manage customer identities and optimise marketing campaigns.

CDPs empowers organisations to unlock actionable insights from vast datasets. These platforms analyse customer behaviours, preferences, and interactions to create comprehensive customer profiles. This invaluable information facilitates hyper-personalised marketing campaigns, enhancing customer engagement and loyalty.

With the flexibility to integrate with various marketing tools and systems, they streamline data management, empowering businesses to make data-driven decisions.Leveraging machine learning and open-source principles, they empower businesses to unlock the full potential of their customer data, revolutionising marketing campaigns and driving sustainable growth.

Organise Your Data in an Accessible Manner to All Relevant Teams

CDPs are able to collect data and handle all of the information that comes from different sources. From social media posts, website interactions, behavioural data, or even purchase history . It combines all those data points into one place so you can see what's happening across all channels at once.

Moreover, you can also push relevant data that you’ve obtained inside your CDP into different tools. Different tools may be relevant to different teams. This way, you can push different information depending on the needs of a business unit.

For example, you can push customer data who have purchased a certain product inside your digital platform to other platforms. This could be a certain marketing automation tool or advertising platform of your choice. All without the hassle of manually querying from your customer databases. CDPs has done the heavy lifting for you to create relevant customer profiles.

Manage and Streamline Your Data Flows

CDPs are also able to help manage and streamline data that flows in and out from the CDP itself. You are able to control things which you want to track and not to track.

At Devhaus, our favourite Customer Data Platform, Segment, has a feature called Protocols. This feature helps us to enforce data governance across all of our channels. Protocols help us tremendously by enforcing rules and keeping our data clean. Especially, with the vast amount of data coming in and out from our CDP.

Moreover, Segment also has a pre-made consent manager plugin. This helps in abiding by data privacy regulations.

See Your Customer Behaviour Like Never Before

CDPs are designed to collect real-time first-party data from various sources. You can ingest these data to your product analytics tools. This allows related stakeholders to gain a deeper understanding of customer behaviour and experience. The organisation can identify areas for improvement and make better decisions to drive better results through data analytics

CDP will help your organisation to scale faster by having the right source-of-truth — which is your own customer. Moreover, it will be easier to identify how customers interact with your digital environment.

How does a CDP benefit Software Developers and Engineering Teams?

A customer data platform (CDP) can be a valuable tool for software development teams. By providing teams with a deeper understanding of their customers, a CDP can help teams to develop more successful products and services, increase customer engagement, and improve their overall bottom line.

In addition to providing a deeper understanding of customers, a CDP can also help software development teams to reduce churn, improve customer satisfaction, and gain a competitive advantage in the market.

Here are some of the specific benefits that a CDP can offer software development teams:

1. Improved understanding of customer needs

Description: Customer Data and their behaviour

A CDP can provide software development teams with a deeper understanding of customer needs and pain points. This information can be used to develop new features and products that are more likely to be successful. 

For example, a software development team for a social media app could use a CDP to identify the most popular features among its users, the features that are used most often, and the features that are most important to customers.

The team could then use this information to develop new features and improve existing features, as well as to prioritise development efforts.

2. Increased customer engagement

A CDP can help software development teams to increase customer engagement by providing them with the data they need to create more personalised and relevant experiences.

For example, a software development team for an e-commerce platform could use a CDP to identify the most popular products among its customers, the products that customers have viewed or purchased in the past, and the products that customers have abandoned in their shopping carts.

The team could then use this information to recommend products to customers based on their past behaviour and interests, as well as to send personalised emails and target ads. This can help to increase customer engagement and loyalty.

3. Improved digital product quality

A CDP can help software development teams to improve the quality of their products by providing them with feedback from customers. This feedback can be used to identify and fix bugs, as well as to improve the overall user experience.

For example, a software development team for a SaaS platform could use a CDP to identify the features that are most used by its customers, the features that are causing the most problems, and the features that customers would like to see improved.

The team could then use this information to prioritise development efforts and ensure that the features that are most important to customers are working properly.

4. Reduced churn rate

By identifying customers who are at risk of churning, software development teams can take proactive steps to retain them.

For example, a software development team could use a CDP to identify customers who have not used the product in a while, customers who have contacted customer support with problems, and customers who have abandoned their shopping carts.

The team could then send these customers personalised emails with special offers, discounts, or support resources to encourage them to start using the product again. This can help to reduce customer churn and improve the overall customer experience.

5. Improved customer satisfaction

By providing customers with more personalised and relevant experiences, software development teams can improve customer satisfaction. This can lead to increased customer loyalty and advocacy.

For example, a software development team for a travel company could use a CDP to identify customers who are planning a trip to a particular destination.

The team could then send these customers personalised emails with recommendations for hotels, activities, and restaurants at their destination. This can help to improve the customer experience and make it more likely that customers will recommend the company to others.

6. Competitive advantage

By using a CDP to develop better products and services, software development teams can gain a competitive advantage in the market.

For example, a software development team for a financial services company could use a CDP to develop personalised financial planning tools for its customers.

The team could then use this information to attract and retain customers.

We’ve shown you the benefits of CDPs for your software development team. Here’s how to harness them.

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There are a number of ways that software development teams can harness the benefits of a CDP to their advantage. Here are a few examples:

1. Use customer data to inform product development

Software development teams can use customer data from their CDP to inform their product development decisions. For example, teams can use customer data to identify the most popular features, the features that are used most often, the features that are most important to customers, and the features that are causing the most problems. This information can then be used to prioritise development efforts and ensure that the team is developing products that meet the needs of customers.

2. Use customer data to create personalised experiences

Software development teams can use customer data from their CDP to create more personalised and relevant experiences for customers. For example, teams can use customer data to recommend products, send personalised emails, and target ads. This can help to increase customer engagement and loyalty.

Here are a few specific examples of how software development teams can use customer data to create personalised experiences:

• A social media app could use customer data to recommend new friends and groups to users based on their interests and past activity.
• An e-commerce platform could use customer data to recommend products to customers based on their past purchases and browsing history.
• A SaaS platform could use customer data to send personalised emails to customers with tips and tricks on how to use the product more effectively.
• A travel company could use customer data to send personalised emails to customers with recommendations for hotels, activities, and restaurants at their destination.**

3. Use customer data to improve customer support

Software development teams can use customer data from their CDP to improve their customer support efforts. For example, teams can use customer data to identify customers who are having problems with the product and reach out to them proactively. This can help to reduce customer churn and improve the overall customer experience.

Here are a few specific examples of how software development teams can use customer data to improve customer support:

• A social media app could use customer data to identify users who have reported problems with their account and reach out to them proactively to offer help.
• An e-commerce platform could use customer data to identify customers who have abandoned their shopping carts and reach out to them to offer assistance.
• A SaaS platform could use customer data to identify customers who have contacted customer support with problems and reach out to them to follow up and ensure that their problem has been resolved.

4. Use customer data to make better business decisions

Software development teams can use customer data from their CDP to make better business decisions. For example, teams can use customer data to identify their most profitable customers, the most popular features of their product, and the most effective marketing campaigns. This information can then be used to make better decisions about resource allocation, product development, and marketing strategy.

Here are some cases of how software development teams can use customer data to make better business decisions:

• A social media app could use customer data to identify the types of content that are most popular with users. This information could then be used to develop more of the types of content that users enjoy.
• An e-commerce platform could use customer data to identify the products that are most profitable. This information could then be used to focus marketing efforts on these products and to develop strategies to increase sales of these products.
• A SaaS platform could use customer data to identify the features that are most used by customers. This information could then be used to prioritise development efforts and ensure that the team is focusing on developing features that are important to customers.

A CDP can be a powerful tool for software development teams to improve their products, services, and customer relationships. By providing teams with a deeper understanding of their customers, a CDP can help teams to make better decisions about product development, create more personalised experiences, improve customer support, and make better business decisions.

A Typical Use Case of a CDP: How your company and your software development team would leverage a Customer Data Platform (CDP)

Let’s say Acme, Pte. Ltd. is a B2B tech company that offers cloud-based solutions to businesses. They have a diverse customer base and use multiple tools to interact with their customers, including email marketing software, customer relationship management (CRM) systems, and customer support platforms. However, they struggle with data silos and lack a unified view of their customers.

Implementation of CDP

Description: Improving metrics with implementation of a Customer Data Platform (CDP)

To address these challenges, Acme decides to implement a CDP. The CDP consolidates data from all their tools into a single centralised customer database. This includes data on all touchpoints and interactions with their product or service. The CDP also integrates with various analytics and marketing tools, enabling Acme to leverage their customer data for various purposes.

Benefits to the Software Development Team

• Improved Product Development: With access to high-quality, real-time customer data, the software development team can better understand how customers are using their products using their existing product analytics tools. This allows them to make data-driven decisions when developing new features or improving existing ones. They can also test and validate their products with real customer feedback.
• Efficient Workflows: The CDP automates the collection and management of customer data, saving the software development team significant time and resources that were previously spent on manual data handling. The CDP also provides a consistent data format and structure, making it easier for the team to work with the data and troubleshoot issues.
• Personalised Customer Experience: The unified customer view enables the team to personalise the user experience based on individual customer behaviours and preferences. They can also use the CDP to segment customers based on various criteria and deliver tailored messages and offers across different channels.

Driving Growth for the Company

• Enhanced Customer Satisfaction: By delivering a more personalised and seamless user experience, Acme can enhance customer satisfaction, leading to increased customer retention. They can also use the CDP to measure customer satisfaction metrics such as Net Promoter Score (NPS) and Customer Lifetime Value (CLV).
• Informed Business Decisions: The real-time insights provided by the CDP enable Acme to make informed business decisions, helping them identify growth opportunities and optimise their strategies. They can also use the CDP to monitor key performance indicators (KPIs) such as revenue, conversion rate, and churn rate.
• Increased Operational Efficiency: By automating data collection and management, Acme can increase operational efficiency, allowing them to focus more resources on strategic growth initiatives. They can also use the CDP to automate workflows and processes such as email campaigns, lead generation, and customer support.

In this way, a CDP can play a crucial role in driving growth for Acme, Pte. Ltd., particularly for the software development team. Good news is, you can apply this to your business, too!

Using Grants to Help You Subsidise Your CDP Implementation

If you're not familiar with Customer Data Platform (CDP), we'd strongly advise you to work closely with subject matter experts. Devhaus has worked to implement CDPs with different companies from different industries; from Fintech like Wallex or to a DevSecOps platform like Scantist, we’ve got you covered.

Moreover, you can get your project to be subsidised up to 50% (for certain industries). Dom, our VP of Advanced Services, has taken the time to explain grants in this short video. Watch the overview video below:

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Our Top Grant Picks

We would highly recommend the following grants to help with your business growth:

• EDG Automation Grant: Allows you to adopt cutting-edge technology and automation. This can result in tangible benefits, significant growth and resource efficiency.
• EDG Product Development Grant: Help your company develop innovative technology and products with the end goal of commercialisation.

You can book a quick discovery call with our team today to understand how a Grant can impact your business revenue and growth!

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